Case Notes/Answers
Mabe Learning to Be a Multinational (A) By Jose Luis
Rivas, Luis Arciniega
Discussion Questions:
1. What action should Ramiro Perez take with regard to Mabe`s JV in Russia?
2. What lessons has Mabe learned that it can apply to future international expansions?
3. Would another emerging country have been a better investment for Mabe than Russia?
4. Assess whether Fagor is the appropriate partner for the Russian JV.
, W13094
Teaching Note
MABE: LEARNING TO BE A MULTINATIONAL
SYNOPSIS
Mabe was a Mexico-based multimillion-dollar family business that manufactured stoves and refrigerators. In 1987,
GE acquired 48 per cent of the business. Due to this infusion of both capital and knowledge, Mabe became the
market leader in appliances in Mexico and started expanding to other Latin American countries. Mabe acquired
GE’s appliances facilities in such markets as Canada and Brazil. By 2008, Mabe had manufacturing facilities in all
the key markets in the Americas. Due to the 2008 financial crisis, GE considered selling its appliance businesses
worldwide, and Mabe was one of the main bidders. In the end, GE’s board decided not to sell. Because economies
of scale are a key success driver for appliance manufacturers, and all global players had multiregional operations in
place, Mabe decided to venture outside the Americas into Russia in a joint venture (JV) with Spain’s Fagor in 2008.
Four years later, in 2012, Ramiro Perez, Mabe’s vice-president of International Sales, is puzzled because entering
Russia has been more problematic than expected. Employee turnover is high and executive talent is scarce. To
complicate things further, the financial crisis of 2009 created worldwide excess capacity in the appliance sector,
leading to the Russian market being swamped with excess production.
TEACHING OBJECTIVES
To understand the motives, potential benefits and implications of an international expansion
To learn about the importance of assessing local cultures before entering foreign markets
To understand the need to continuously adapt entry strategies, even those that have proved successful in the past
POSITION IN THE COURSE
This case is suitable for both undergraduate and graduate audiences and can be used in the following courses or
areas of study:
Global strategy and the motivation to expand abroad, including an understanding of the international context
and developing transnational strategies
Mabe Learning to Be a Multinational (A) By Jose Luis
Rivas, Luis Arciniega
Discussion Questions:
1. What action should Ramiro Perez take with regard to Mabe`s JV in Russia?
2. What lessons has Mabe learned that it can apply to future international expansions?
3. Would another emerging country have been a better investment for Mabe than Russia?
4. Assess whether Fagor is the appropriate partner for the Russian JV.
, W13094
Teaching Note
MABE: LEARNING TO BE A MULTINATIONAL
SYNOPSIS
Mabe was a Mexico-based multimillion-dollar family business that manufactured stoves and refrigerators. In 1987,
GE acquired 48 per cent of the business. Due to this infusion of both capital and knowledge, Mabe became the
market leader in appliances in Mexico and started expanding to other Latin American countries. Mabe acquired
GE’s appliances facilities in such markets as Canada and Brazil. By 2008, Mabe had manufacturing facilities in all
the key markets in the Americas. Due to the 2008 financial crisis, GE considered selling its appliance businesses
worldwide, and Mabe was one of the main bidders. In the end, GE’s board decided not to sell. Because economies
of scale are a key success driver for appliance manufacturers, and all global players had multiregional operations in
place, Mabe decided to venture outside the Americas into Russia in a joint venture (JV) with Spain’s Fagor in 2008.
Four years later, in 2012, Ramiro Perez, Mabe’s vice-president of International Sales, is puzzled because entering
Russia has been more problematic than expected. Employee turnover is high and executive talent is scarce. To
complicate things further, the financial crisis of 2009 created worldwide excess capacity in the appliance sector,
leading to the Russian market being swamped with excess production.
TEACHING OBJECTIVES
To understand the motives, potential benefits and implications of an international expansion
To learn about the importance of assessing local cultures before entering foreign markets
To understand the need to continuously adapt entry strategies, even those that have proved successful in the past
POSITION IN THE COURSE
This case is suitable for both undergraduate and graduate audiences and can be used in the following courses or
areas of study:
Global strategy and the motivation to expand abroad, including an understanding of the international context
and developing transnational strategies
